5 Stocks Spiking on Big Volume - views

WINDERMERE, Fla. (Stockpickr) -- Professional traders running mutual funds and hedge funds don’t just look at a stock’s price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by “superinvestors.”

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it’s always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

Progressive (PGR), which provides personal and commercial automobile insurance and other property-casualty insurance and related services throughout the U.S., closed up 2.7% at $21.68 on Wednesday.

Wednesday's Volume: 15.58 million

Average Volume: 6.05 million

Volume % Change: 350%

From a technical perspective, PGR gapped higher here back above its 50-day moving average of $21.40 with monster upside volume. This move is quickly pushing PGR within range of triggering a near-term breakout trade. That trade will hit if PGR manages to take out some near-term overhead resistance levels at $21.77 to $21.87 with high volume.

Traders should now look for long-biased trades in PGR as long as it’s trending above its 200-day at $20.47, and then once it sustains a move or close above those breakout levels with volume that hits near or above 6.05 million shares. If that breakout hits soon, then PGR will set up to re-test or possibly take out its next major overhead resistance levels at $22.17 to $22.37.

Tiffany

Tiffany (TIF), which operates as a jeweler and specialty retailer, closed up 2.7% at $58.93 on Wednesday.

Wednesday's Volume: 5.36 million

Average Volume: 1.79 million

Volume % Change: 169%

From a technical perspective, TIF trended higher Wednesday right above some near-term support at $56 with above-average volume. This move is quickly pushing TIF within range of triggering a near-term breakout trade. That trade will hit if TIF manages to clear its 200-day moving average at $60.13 and its 50-day moving average at $60.35 with high volume.

Traders should now look for long-biased trades in TIF as long as it’s trending above $57, and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.79 million shares. If that breakout hits soon, then TIF will set up to re-test or possibly take out its next major overhead resistance levels at $62 to $63.90.

Keep in mind that any move above $60 will mean that shares of TIF have started to trade into its previous gap down zone from December that started at $63.90.

Molycorp

Molycorp(MCP) is a rare earth oxide producer in the Western Hemisphere. The company owns fully developed rare earth project outside of China. This stock closed up 10% at $10.39 on Wednesday.

Wednesday's Volume: 19.97 million

Average Volume: 6.93 million

Volume % Change: 150%

Shares of MCP exploded higher Wednesday after Bloomberg.com said the company could be a takeover target.

From a technical perspective, MCP gapped sharply higher right off its 50-day moving average of $9.25 with monster upside volume. That move is quickly pushing shares of MCP within range of triggering a major breakout trade. That trade will hit if MCP manages to clear some near-term overhead resistance levels at $11.75 to $11.89 with high volume.

Traders should now look for long-biased trades in MCP as long as it’s trending above its 50-day at $9.25, and then once it sustains a move or close above those breakout levels with volume that hits near or above 6.93 million shares. If that breakout hits soon, then MCP will set up to re-test or possibly take out its next major overhead resistance levels at $13 to $14.44.

Ellie Mae

Ellie Mae(ELLI) is an electronic mortgage origination network in the U.S. whose network and the technology-enabled solutions help streamline and automates the mortgage origination process. This stock closed up 0.54% at $27.90 on Wednesday.

Wednesday Volume: 1.50 million

Average Volume: 622,976

Volume % Change: 180%

From a technical perspective, ELLI bounced higher Wednesday right off some near-term support at $27 with above-average volume. This move briefly pushed shares of ELLI into breakout territory, since the stock challenged some near-term overhead resistance levels at $28.86 to $30.40. Shares of ELLI hit an intraday high of $30.59 and volume was well above its three-month average action of 622,976 shares.

Traders should now look for long-biased trades in ELLI as long as it’s trending above $27 to $26.26, and then once it sustains a move or close above $30.40 to $30.59 with volume that hits near or above 622,976 shares. If ELLI clears those levels soon, then this stock will set up to enter new 52-week high territory above $30.59. Some possible upside targets off that move are $33 to $35 in the near future.

On Assignment

On Assignment(ASGN), a global provider of highly skilled, hard-to-find professionals in the growing life sciences, health care and technology sectors, closed up 8.4% at $22 on Wednesday.

Wednesday's Volume: 1.02 million

Average Volume: 275,256

Volume % Change: 215%

From a technical perspective, ASGN gapped higher Wednesday right above is 50-day moving average of $19.48 with heavy upside volume. This move pushed shares of ASGN into breakout territory and new 52-week-high territory, since the stock took out some near-term overhead resistance levels at $20.24 to $20.93.

Traders should now look for long-biased trades in ASGN as long as it’s trending above Wednesday's low of $21.01 with strong upside volume flows. I would consider any upside volume day that registers near or above its three-month average action of 275,256 shares as bullish. If ASGN can maintain that trend, then this stock will set up to continue on its path into new 52-week high territory above $22.05. Some possible upside targets off any move above $22.05 are $25 to $27 in the near future.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.